Hot Stove: Deferred cash still an issue
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When the Pirates dealt catcher Jason Kendall to the Oakland Athletics in December, they erased from their books $32.5 million in salary over the next three years, a figure that could have consumed a third of the payroll. Management made no secret of its relief at being rid of that burden.
Still, the Pirates hardly are free from obligations to the early stages of that contract and to one other prominent one. They owe a total of $14 million to Kendall and another departed player, outfielder Brian Giles, and it could take two decades to pay up.
The Pirates owe Kendall $1.5 million in deferred compensation, a remnant of $500,000 that was deferred in each of the first three seasons after he signed his six-year, $60 million contract in November 2000. They will pay Kendall $500,000 in 2008, then again in each of the next two years. After that, the Athletics are due to make the final three payments of $500,000. Dan Lozano, Kendall's agent, confirmed that no payments have been made early.
Giles, who was traded to the San Diego Padres in August 2003, is owed $12.5 million in deferred compensation. His five-year, $45 million contract, signed in May 2000, included an $8 million signing bonus of which $5.5 million was deferred. It also deferred $7 million of salary in 2000-02. He spent all three seasons in Pittsburgh, making the Pirates responsible for all deferments, which start in 2011 and must finish by 2025. Joe Bick, Giles' agent, confirmed that no payments have been made early.
Even before it is due, deferred compensation is included by Major League Baseball when it calculates each team's annual payroll and when it weighs debt-to-equity ratio. MLB implemented a debt service rule in 2002, one that limits the debt each team can carry in proportion to its equity.
Although the Kendall and Giles payments will not directly affect 2005 payroll, other old contracts will. The Pirates paid a total of $775,000 to buy out the 2004 contracts of first baseman Randall Simon ($250,000) and third baseman Chris Stynes ($225,000) and to buy out the 2005 option of right-hander Brian Boehringer ($300,000). Even though that money was paid last year, it will count toward the 2005 payroll.
Also factored into the payroll will be the cost of paying injured players. The Pirates will pay the major-league salaries of right-hander John Van Benschoten ($316,000), who is out for the season because of shoulder surgery, and left-hander Sean Burnett ($321,000), who is not expected to return until August because of elbow surgery.
The Pirates have projected a payroll near $40 million, but they are not on pace for that. They have signed all 12 players likely to command significantly more than the minimum salary of $316,000, and those contracts total $32.04 million. Other teams are paying the Pirates between $4.1 million and $5.1 million to cover parts of three of those salaries. The final 13 contracts should add up to a total in the range of $4.5 million, leaving the payroll at about $32 million.
It is impossible to predict where the payroll will be by season's end. But, two years ago, the Pirates entered the season with $47.5 million owed in base salary and wound up paying $56.9 million when additional players, deferred compensation, buyout clauses, injured players and spring training termination monies were counted.
Fifteen members of the 40-man roster remain to be signed, all of whom have their rights controlled by the Pirates. That means the team can impose any salary from the minimum $316,000 and upward. Twelve players have received the minimum, and most of the rest are expected to be just above that. The only players assured of marked raises are outfielder Jason Bay and left-hander Oliver Perez, each of whom is coming off an exceptional 2004.
Van Benschoten has had no setbacks in the early stages of rehabilitation from his Jan. 27 surgery. He joined the Pirates Thursday in Bradenton, Fla.
Should management move Bay from left field to center, as is being discussed, Bay made clear he would take no issue with it: "I just want to play. I played a lot of center in college and a couple of times a week in the minors. I'm very comfortable there. Left field at PNC is also very big, which makes left and center like the same position. If it's going to make our lineup better, I'll make that adjustment."
The Pirates will receive between $1 million and $2 million from the Cleveland Indians this year to cover part of outfielder Matt Lawton's $7.25 million salary. However much the Pirates receive, they will pay back almost the same amount -- but slightly less -- in 2006.
Only two of the 65 luxury suites at PNC Park are available for purchase on a full-season basis, according to Joan Schmitt, manager of premium sales.
Four days until pitchers and catchers report.
First Published February 13, 2005 12:00 am